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Groton receives AA+ rating from Standard & Poor's

By Pierre Comtois, Correspondent

Updated:
04/09/2013 12:35:07 AM EDT

GROTON -- Officials learned the town received a AA+ rating from Standard & Poor's, clearing the way for the issuance of a bond covering the cost of construction of a new Center Fire Station planned along Farmers Row.

News of the high rating was divulged by town manager Mark Haddad at the April 8 meeting of the Board of Selectmen.

The top rating was important to the town making the $7.7 million it needs to borrow to build the fire station more affordable in the long run.

According to the town's financial adviser, Clark Rowell of UniBank, eight bids were received almost on the moment of the bond's issuance, with the winner coming in with a suggested 2.36 percent interest rate.

"This was a very good, very aggressive bid," Rowell told selectmen.

To be paid in increments beginning at $428,000 in the first year, the bond will be taken out for 22 years with payments in its final years much less than in the earlier years.

Also in the town's favor was a drawdown in the winning bid that placed the final interest rate at 2.26 percent for a total cost of the fire-station project of $9.5 million.

In upgrading the town's rating to AA+, Standard & Poor's raised it from an already impressive rate of AA and applied the new rating to the fire-station project as well.

"The outlook on all the ratings is stable," stated the agency's report.

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"The upgrade follows a review of the town's financial policies and practices, which we have determined are strong, well embedded, and likely sustainable."

Factors listed by Standard & Poor's as bearing on the final rating included the town's residential tax base; its residents' "very strong wealth and incomes and low unemployment;" its "stable budgetary performance and strong financial reserves;" and a "moderate overall net debt burden...and manageable long-term liabilities."

The agency's findings about the town in general were also surprising including its conclusion that though "employment growth in New England will remain tepid through 2014," Groton's unemployment figures were expected to remain favorable and below the state and national averages.

Further, "the town's household incomes are very strong in our opinion."

In Groton, "the median household effective buying income is 165 percent of the state average and 192 percent of the national average."

The town's per-capita household income is 148 percent of the state average and 179 percent of the nation's.

Among the town's total average assessed property, 3 percent was covered by 10 individual taxpayers.

"Despite a challenging budgetary environment, Groton's financial position has been very stable over the past five audited years," concluded the report. "We believe a culture of conservative budgeting and a relatively stable revenue profile had contributed to strong, consistent financial operations."

The favorable report came following a visit to Groton two weeks ago by representatives of Standard & Poor's, in which they were given a tour and allowed to view financial records.

"Basically, all our books were open to them," Haddad told selectmen, who then voted to authorize the borrowing needed to pay for the bond.

According to Haddad, if all goes well, the new Center Fire Station should be completed by April, 2014.

Also Monday, selectmen:

* Voted to ratify the appointment of Kathy Shelp as the town's new Council on Aging director. Shelp, with experience in a New York based senior center, will begin work on May 1 replacing departing Director Martha Campbell.

* Decided to support a request by the Town Meeting Review Committee for an expenditure of $800 to cover the mailing of survey questions to residents via electric bills issued by the Groton Electric Light Department. The committee has been charged by selectmen with reviewing the viability of Town Meeting, including its legal framework, cost to the taxpayer, the times meetings are held, and any other subject it deems proper and to make recommendations for improvements, if any are needed, to the board. The survey is a tool needed to discover what issues top voters' concerns regarding the institution.

* Chose to support a warrant article sponsored by the Parks Commission aimed at raising funds needed to develop 35 acres of town-owned land adjacent to the transfer station as playing fields. The commission intends to offer voters a pair of warrant articles: One would seek $309,000 from the CPC and the other would authorize the town to borrow the balance of $591,000 with the condition that the money would not be used unless the Parks Commission wins a state grant of $400,000. Private sports groups will also pitch in to help pay for the fields.

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